Why should you invest in wine?
Stock markets have performed poorly in the past few years with heightened risks. Investors are looking for alternate investment options to balance their losses. This volatile market has made wine an attractive investment option. The year 2009 to 2011 witnessed an extraordinary increase in wine prices as mentioned in the Liv- Ex platform. Liv- Ex is one of the most known and popular wine trading platform available online. More than thousands of wine investors trade wine on a regular basis with this platform.
Somehow, there was a slump in the market after 2011, but the market recovered and stabilized in 2013. The market trends appear to be healthy enough for an investment. This limited availability asset has attracted even the Wall Street with its incomparable returns. However, wine investments are not covered with the Financial Services Compensation Schemes, and it is for investors who are willing to take the risk.
How much money do you need to invest in wine?
There are some secondary costs involved in wine investments including professional storage for wine, insurance, taxes, and fees. However, you can get rid of all the taxes including VAT with bonded storage cellars. You can expect to pay up to GBP20 per year for your storage. It is best to consult a wine broker to understand all the taxes involved in the process.
How can you make investments in wine?
There are plenty of methods to invest in wine, and it is best to choose the most suitable one for your investments.
» Wine Merchants
If you are planning to invest in wine, wine merchants are the best people to get in touch with. Start by looking for an excellent wine merchant with a proven track record. The past few years have witnessed an increase in the number of wine frauds and it is important to be aware of such fraudulent merchants. Get a review of the merchant from other investors and see their registration before purchasing a Wine. These merchants do not charge fees, and they usually have a 10 percent margin in the overall price of the wine.
» Wine funds
This is indeed the safest method to invest in a wine. You will have a fund manager to look after the wine, and you will not be responsible for managing or storing the wine. It simply implies that you are not dealing with Wine directly, and your investment is based upon the trading of wine in the open market.
You can start your investments from GBP10,000 onwards along with some other deductible fees. Some of the most famous Wine investments funds include the Vintage Wine Fund, Wine Growth Fund, and Fine Wine Fund.
» Wine Trading
One can start trading Wine at different online platforms including Liv- Ex and Cavex. The buyers can have a look at the photos, storage certificates, and receipts of the wine. It is necessary to have a decent knowledge of the Wine market before you start trading online.
The wine market is similar to any other investments and it is best to go with the reviews of expert like Robert Parker. The wine market may swing a bit, but it will offer long term returns in the longer run.
Last update: 14. January
"Money is not an invention of the State. It is not the product of a legislative act. Even the sanction of
political authority is not necessary for its existence. Certain commodities came to be money quite naturally, as
the result of economic relationships that were independent of the power of the State."
Carl Menger - the founder of the Austrian school of economics